Willis, a risk management and insurance intermediary, recentlyreleased an analysis of the Protection and Indemnity (P&I) lineof insurance for 2007/2008, saying that the year could have theworst ever claim history on record.

The study, called Protection and Indemnity Market Review,contains financials and claim information broken down into "clubs"that have member countries or regions. It showed that 2007/2008registered the highest recorded level of international outstandingP&I claims. Those facts were evident for the American club,which had net paid claims increase by 23 percent and netoutstanding claims top $24 million. Large gains in investmentincome, which nearly doubled, helped compensate for the negativeeffects, however.

Willis said that the development of very large claims was one ofthe primary factors in the increase in outstanding claims, notingthat 2006/07 will represent the worst ever Pool claims cost resultfor the market. Willis said the leap in the cost of large claimsand their inevitable impact on P&I rating going forward hasbeen one of the key points of discussion during 2007/08. They wenton to say that the increase in Pool claims alone (compared to theaverage claim levels of the previous two years) is equivalent tobetween eight and nine percent of the entire premium into theInternational Group.

P&I Insurance protects a vessel or ship and its owners andoperators against liability for bodily injury and third-partyproperty damage. The policy provides liability protection forinjury, illness, and loss of life resulting from the operation ofthe insured vessel, loss or damage to the property of others not onboard, and the costs involved in investigating and defending claimsand lawsuits. It also is commonly written in conjunction with Hull& Machinery insurance for vessels and marine operations such astugs, barges, fishing vessels, excursion boats, and marinecontractors.

The full report is available at www.willis.com.

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